UK government and EU should should signal that NI is open for business and incentivise the benefits of the Protocol and the Windsor Framework (PWF) by cutting corporation tax says MLA Steve Aiken

UUP MLA Steve Aiken has today called on the UK Government to implement parity of Corporation Tax (CT) with the Republic of Ireland (RoI) and let Northern Ireland compete on an equal footing.

Mr Aiken, who sits on the Executive’s Finance Committee, thinks that reducing from the current rate of 19% to 15% would help attract investment. 

Commenting on the lack of any real investment and what he describes as a ‘stalled system’ he said: ‘The ‘Protocol’ and ‘Windsor Framework’ (PWF) have been sold by UK, USA, EU and by the wider business community as an opportunity to be the best of both worlds. 

'This was going to open an avalanche of FDI and improved economic investment. However,   despite being in place for several years there has been minimal significant investment. 

'The extra costs of doing business with NI, especially internally within the UK, coupled to the very real physical checks and changes being implemented are having a negative effect on investment.

'There is no ‘signal’ to say NI is open for business and that there is any significant advantage to investing here, especially in comparison to our neighbour who has a corporation tax rate of 12.5% (though rising to 15 %). '

According to Mr Aiken currently the ability to devolve CT is subject to getting NIs finances in order and also accepting a reduction in the ‘block grant’ to cover the anticipated tax loss. However, there is no compensatory mechanism built in to counter the negative impacts of the PWF. 

Mr Aiken thinks that reaching a consensus with the Government on this is vital.

He said: ‘There needs to be agreement between the UK and EU that any reduction would not equate to an unfair advantage or state aid but rather an incentive to allow for wider acceptance of the PWF’.

'Agreement between NI Exec & Treasury (HMT) should be made that the reduced CT take would not be linked to a Block Grant Adjustment (BGA) for a period of 10 years. This should be easy to agree to as the Prime Minister has indicated that NI will be the best place to do business, and therefore the increase in companies paying the 15% rate, will more than compensate for the initial reductions in CT take.’